Germany Warns Greece Against Isolation as Tsipras Shunned. Greece’s government risks isolation in the
European Union by threatening to break ranks on sanctions
against Russia and ditch its bailout deal, German Chancellor
Angela Merkel’s minister for European affairs said. “Greece is firmly anchored in the mainstream of the
European Union,” Michael Roth, who’s also deputy foreign
minister, said in an interview. “I can only hope that this is
where it wants to stay.” Prime Minister Alexis Tsipras’s government, sworn in
Tuesday, is putting Greece’s financial lifeline at risk, the
German Finance Ministry said. Greece’s bailout terms mean his
government needs to undertake further reforms by the end of
February. Extending the deadline would only make sense if
Tsipras showed willingness to implement agreed reforms, and
“the announcements from Athens go in the opposite direction,”
ministry spokesman Martin Jaeger said Friday.

Greece Sets Up Cash Crunch for March Telling EU It’s Over. Finance Minister Yanis Varoufakis said
Greece won’t seek an extension of its bailout agreement, setting
the government on course to enter March without a financial
backstop for the first time in five years. Greece won’t engage with officials from the troika of
official creditors who have been policing the conditions of its
rescue since 2010. It’s five-day-old government wants a new deal
with the European Union that allows for more spending,
Varoufakis said at a joint press conference with Eurogroup Chief
Jeroen Dijsselbloem in Athens, Friday.

Ukraine Rebels Urge Cease-Fire Talks After Territorial Gains. Rebels fighting government forces in Ukraine
said they’re ready to discuss peace terms with the
administration in Kiev after taking more territory and
surrounding a key railway town. Artillery shells rained down on the eastern city of
Debaltseve, where rebels said they had surrounded government
positions in an assault that Ukraine and its allies in the U.S.
and the European Union say is backed by Russia. Negotiators for
the self-proclaimed rebel entities in the Donetsk and Luhansk
regions called for a demarcation line agreed in a Sept. 5 truce
in Minsk, Belarus to be moved to reflect their advance.

Ruble Slides to Lowest Since December Panic on Surprise Rate Cut. The ruble slumped to the weakest level since
panic swept across Russian financial markets last month after a
surprise interest-rate cut signaled the central bank no longer
considered tackling inflation its primary task. The currency tumbled as much as 4.3 percent to 71.8465
after borrowing costs were reduced by 200 basis points to 15
percent, in contrast to the expectations of all but one of 32
economists surveyed by Bloomberg. It hasn’t breached 70 since
Dec. 17, a day after the currency tumbled past 80 in a rout that
wreaked havoc across emerging markets.

Ruble Bulls Facing $10 Billion Reason to Adjust Positions. Think the ruble’s close to finding its
bottom? Investors might want to wait a month before deciding
yes. Along with the central bank’s surprise rate cut on Friday, the
threat of expanded sanctions over Ukraine and the prospect of a second,
or third, downgrade to junk, Russian companies need $10.2 billion of
foreign currency to repay maturing debt in
February, according to data compiled by Bloomberg. Next month is
the biggest for corporate redemptions this year, accounting for
almost a quarter of the total.

Spain Compares Greek Debt Request to Catalan Independence. Spain’s deputy minister for the European
Union, Inigo Mendez de Vigo, compared Greece’s request for a
debt writedown to Catalonia’s push for independence and said EU
officials won’t accept either. Mendez de Vigo insisted EU members are bound by common
rules and must honor their commitments to each other in a speech
at the University of Navarre, Spain, on Friday.

Honda Cuts Profit Forecast After Recall Costs Mount. Honda Motor Co., Japan’s third-largest
carmaker, cut its profit forecast for the second time in as many
quarters recall costs mount. Net income will probably be 545 billion yen ($4.6 billion)
in the fiscal year ending March, the Tokyo-based carmaker said
in a statement today. That compares with the 565 billion yen the
company previously forecast and the 591.2 billion yen average of
24 analysts’ estimates compiled by Bloomberg. Honda in October
cut an earlier forecast.

Canadian Bank Stocks on Pace for Worst Start in 25 Years. Canadian bank stocks are on track for their
worst start to the year in a quarter century as a plunge in
crude oil and overstretched consumers dim their profit outlook. The eight-company Standard & Poor’s/TSX Commercial Banks
index has dropped 9.5 percent this month, the weakest start to
the year since a 12 percent decline in January 1990, according
to data compiled by Bloomberg.

Europe Stocks Head for Best January Since 1989. European stocks declined, paring the best
start to a year since 1989, as banks and telecommunications
companies dropped. The Stoxx Europe 600 Index dropped 0.5 percent to 367.05 at
the close of trading. The gauge rose as much as 0.4 percent
earlier, before falling as much as 0.7 percent as Russia’s
central bank unexpectedly cut its key rate.

Oil Rebounds on Speculation Low Prices Slowing Output. Crude oil rose for a second day on
speculation the almost 60 percent slump in prices over the past
seven months will slow production.
The oil rig count fell to a three-year low of 1,223 this
week, Baker Hughes Inc. reported.

VIX Calls Most Hated Since 2012 as Traders Shrug Off Volatility.
Even with stock swings nearly doubling since 2014 and U.S. equities
poised for their worst month in a year, traders aren't signaling too
much concern. Investors own about 2.4 million options betting on a rise
in the Chicago Board Options Exchange Volatility Index, compared to
about 1.6 million contracts wagering on a drop. That's around the lowest
ratio of calls to puts in more than two years, Bloomberg data show,
indicating traders don't anticipate an increase in market turbulence
anytime soon. "Those that typically use VIX call options to hedge long
portfolios could be giving up on those hedges," Max Breir, a senior
equity-derivatives trader at BMO in NY, said by phone.

Bullard Says Markets Wrong Not to Expect Mid-Year Rate Rise. Federal Reserve Bank of St. Louis President
James Bullard said investors are wrong to expect the Fed to
postpone an interest-rate increase beyond midyear, with the U.S.
economy leading global growth and unemployment dropping. “The market has a more dovish view of what the Fed is
going to do than the Fed itself,” Bullard said in an interview
Friday in New York. “Markets should take it at face value”
from the Fed’s rate projections, and it’s “reasonable” to
expect an increase in June or July.

Greece 'Doesn't Want' EU7b Bailout Tranche, Varoufakis Says. "Out
task is not to get the next loan tranche," which would be merely
"kicking the can down the road," Greek Finance Minister Yanis Varoufakis
is cited as saying. Greece asks "an opportunity to put together a
proposal that will minimize the costs of Greece's loan agreement and
give this country a chance to breathe again after policies that created
massive social depravity," he said. EC President Jean-Claude Juncker's
EU300b investment plan is "a public relations gimmick that has
unfortunately occupied the minds of good people for too long - it will
be a failure," he said. "We want to ensure that this country becomes an
attractive destination for foreign direct investment, but not interest
in a fire sale or selling the family silver," he said.

Worsening Asset Quality Hits Banks; Sensex Sinks 600 Points. The BSE Sensex declined as much as 611 points in intraday trade on
Friday as banking stocks came under sharp selling pressure. The Nifty
snapped its 10-day rally that had powered the blue chip index to several
record highs in the last few days. State-run lenders bore the brunt of
the carnage with the sub-index of PSU banks on the National Stock
Exchange ending 6 per cent lower.

Thursday, January 29, 2015

Japan Limps Out of Recession With December Production Gain. Japan’s industrial production snapped two
quarters of decline, signaling the world’s third-largest economy
may have limped out of recession. Output rose 1.8 percent in the three months through
December from the third quarter, the trade ministry said Friday.
While household spending fell and inflation slowed in December,
the labor market continued to tighten, with the ratio of jobs to
applicants rising to the highest in more than two decades and
the unemployment rate falling to the lowest since August 1997.

Top Economist Says BOJ Doesn’t Need More Stimulus: Japan Credit. Japan’s top-rated economist says the central
bank doesn’t need more stimulus, defying the consensus. Ryutaro Kono, chief Japan economist in Tokyo at BNP Paribas
SA, voted No. 1 by Nikkei Veritas magazine in six of the past
seven years, says lower oil prices will stimulate growth and
policy makers will favor yen stability. Twenty-six of 33 of
economists in a Bloomberg News survey forecast the Bank of Japan
will accelerate asset purchases by the end of October to meet a
2 percent inflation target. Ten-year inflation swaps slid to a
two-year low of 0.74 percent this week, Meitan Tradition data
showed.

Taiwan’s GDP Growth Misses Economists Estimate in Fourth Quarter. Taiwan’s economy grew slower than economists
estimated last quarter after a food scandal weighed on demand. Gross domestic product rose 3.17 percent from a year
earlier in the three months through December, according to
preliminary data the statistics bureau released in Taipei
Friday. That missed the 3.25 percent median estimate in a
Bloomberg survey of analysts and declined from 3.63 percent in
the prior quarter. The economy expanded 3.51 percent in 2014.

Asian Stocks Advance to Extend First Monthly Gain Since October. Asian stocks rose, with the regional
benchmark index extending its firstly monthly gain since
October, as Japanese shares climbed after the yen weakened
against the dollar on a drop in U.S. jobless claims.
The MSCI Asia Pacific Index added 0.3 percent to 140.91 as
of 9:01 a.m. in Tokyo.

Plunging Oil Prices Felt Across Japan’s Industrial Base. The plunge in crude oil prices is taking its
toll across Japan’s industrial base. Forecasts from Nippon Steel & Sumitomo Metal Corp., Japan
Marine United Corp. and Komatsu Ltd. show the extent to which
lower crude prices are eroding the outlooks for industrial
companies with businesses linked to oil and gas.

Iron Ore Set for Monthly Loss as ABN’s Crystal Ball Shows No Joy. Iron ore is heading for the biggest monthly
loss since May, signaling that the bear market that began last
year has further to run as steel mills in China curtail output
before a national holiday and major producers add supply. Ore with 62 percent content delivered to Qingdao, China,
was at $63.27 a dry metric ton on Thursday, 11.2 percent lower
this month, according to Metal Bulletin Ltd. The raw material
fell to $63.09 on Wednesday, the lowest price on record going
back to May 2009, and is poised for a third monthly drop.

Hillary Clinton Faces Scrutiny for Use of Private Jets.Hillary Clinton took more than 200 privately
chartered flights at taxpayer expense during her eight years in
the U.S. Senate, sometimes using the jets of corporations and
major campaign donors as she racked up $225,756 in flight costs.

Falling Prices Spread Pain Far Across The Oil Patch. Companies Plan to Slash Spending Along With Thousands of Jobs. Rumor became reality here last week when dozens of workers lost their
jobs at Laredo Petroleum Inc. The Oklahoma-based energy outfit said it
closed its regional office to cope with plunging oil prices.

Former Hedge-Fund Managers Hit the Comeback Trail. Veteran Stock Pickers Michael Karsch, Adam Weiss Plan New Funds. It can be tough to start over in the hedge-fund world. The
$2.8 trillion industry is strewed with tales of managers who, after
shutting down large funds, relaunched only to limp along or close again.
Undaunted, veteran stock pickers Michael Karsch and Adam Weiss plan to
launch new funds less than two years after closing their old firms,
according to Mr. Karsch and people familiar with Mr. Weiss’s plans.

America’s Strategy Deficit. A haphazard foreign policy makes a complicated world more dangerous. Something is going on here. On Tuesday retired Gen. James
Mattis, former head of U.S. Central Command (2010-13) told the Senate
Armed Services Committee of his unhappiness at the current conduct of
U.S. foreign policy. He said the U.S. is not “adapting to changed
circumstances” in the Mideast and must “come out now from our reactive
crouch.” Washington needs a “refreshed national strategy”; the White
House needs to stop being consumed by specific, daily occurrences that
leave it “reacting” to events as if they were...

Fox News:

Official: Gitmo prisoner traded for Bergdahl reaching out to Taliban. (video) One of the five Taliban fighters traded last year for Sgt. Bowe
Bergdahl is trying to make contact with the Taliban once again, Fox News
has learned. A U.S. official confirmed to Fox News that the former Guantanamo
prisoner has been intercepted making telephone calls to the Taliban.
The development comes amid rising concerns over former Guantanamo
detainees returning to the battlefield, and over the nature of the
Bergdahl-Taliban trade itself last year, which was negotiated with the
involvement of the Qatari government.

Chinese banks back risky stock margin finance in face of regulator crackdown. Chinese banks seeking to profit
from the country's stock market frenzy have bought into the
recent surge in margin finance, foiling regulatory efforts to
reduce debt-fueled speculation and amplifying the risk if the
rally turns into a rout. Although regulators are cracking down on credit flows into
the stock market, financial industry insiders say they still
have not closed loopholes that allow banks to channel credit
into the stock market via brokerages.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

EU Moves Toward Tougher Russia Sanctions as Greece Yields. European Union governments moved toward
imposing further economic sanctions on Russia as Greece’s new
administration refrained from casting a veto that could leave it
isolated in Europe.
EU foreign ministers gave the go-ahead to prepare steps
that would go beyond last year’s decisions to ban financing for
Russian state-owned banks and prohibit the export of advanced
energy-exploration technology. The EU will also extend a
blacklist of 132 people including Russian politicians and
military officers involved in the Ukraine conflict by six months
to September, and add more names to the list by Feb. 9. “It does include preparatory work for further punitive
measures,” EU foreign policy chief Federica Mogherini told
reporters after the 28 national ministers met Thursday in
Brussels. “We hope this can help put pressure in particular on
Russia to make positive steps.”

Greek Market Moves Don’t Alter EU Stance, Official Says. (video) Market tension in Greece hasn’t weakened the
European Union’s determination that officials in Athens stick to
commitments under the nation’s international bailout, said
Valdis Dombrovskis, the European Commission’s vice president for
the euro. Stocks in Athens fell this week to lows not seen since the
worst of the debt crisis, with Greek banks losing more than $10
billion of value within 48 hours of the appointment of an anti-bailout cabinet under new Prime Minister Alexis Tsipras. The
markets rebounded Thursday as the government sought to downplay
the prospect of a clash with creditors, with the stocks gaining
3 percent and the yield on benchmark 10-year Greek bond falling
21 basis points to 10.12 percent.

Greek Government’s Signals are ‘Very Mixed,’ ECB’s Jazbec Says. Greece’s new government is sending “very
mixed signals” on its aid program and it's too soon to say how
the country will be treated in the European Central Bank's bond-buying plan, ECB Governing Council member Bostjan Jazbec said. “Our concerns and hopes are related to how the Greek
government will understand the situation and react to it,” he
said in an interview in Ljubljana on Thursday. “It’s too early
to directly answer questions on when and how the ECB can buy
Greek government bonds.”
Jazbec’s comments are the most explicit yet from an ECB
policy maker on the Greek government’s stance.

German Inflation Rate Is Negative for First Time Since 2009. Germany’s inflation rate turned negative in
January for the first time in more than five years, aggravating
a slump in consumer prices in the euro area. Prices in Europe’s largest economy fell 0.5 percent from a
year earlier, the Federal Statistics Office in Wiesbaden said
today. That’s the lowest rate since September 2009. Economists
predicted a drop of 0.2 percent.

Nigeria Torn Asunder as Boko Haram Drive Fuels Caliphate Threat. Islamist fighters have declared a caliphate
in northeastern Nigeria that’s the size of Belgium. Whether the
region becomes autonomous or not, the damage has been done. As Nigeria prepares to hold general elections next month,
Boko Haram is expanding a six-year campaign to impose its strict
version of Islamic law on a region around Nigeria’s northeast
and spilling into neighboring Chad and Cameroon. While it’s
failed to capture the Borno’s capital, Maiduguri, the state’s
emergency agency said this month that its officials can’t travel
to 20 of 27 local government areas in Borno.

Emerging Stocks Decline Amid Crisis Signs From Russia to Greece. Emerging-market stocks fell the most in
three weeks as China intensified its crackdown on speculative
trading and a flareup in the Ukraine conflict stoked concern
that economies in the region are being pushed into crisis. Citic Securities Co. and Haitong Securities Co. fell in
Shanghai as regulators planned a new round of checks into the
margin-lending businesses of brokerages. Russia’s ruble weakened
for a second day and stocks declined on speculation it will face
tougher international sanctions linked to Ukraine. The Ibovespa
sank for a second day in Sao Paulo. Greek banks rebounded from a
slump driven by the new government’s pledge to end austerity.
The MSCI Emerging Markets Index lost 1.4 percent to 971.10
at 11:07 a.m. in New York.

European Stocks Trim Best Month Since 2009 as Shell Declines. European stocks closed little changed,
paring earlier losses, as German inflation data missed
forecasts, while U.S. jobless claims fell to a 15-year low. Royal Dutch Shell Plc slid 4.3 percent after reporting that
fourth-quarter profit rose less than analysts predicted.
Vallourec SA lost 3.8 percent after saying it will write down
the value of assets by as much as 1.2 billion euros ($1.35
billion) as lower oil prices force some customers to cut
spending. Deutsche Bank AG rose 2.6 percent after posting a
surprise quarterly profit.
The Stoxx Europe 600 Index fell 0.1 percent to 368.76 at
the close of trading, after earlier losing 0.8 percent and
rising 0.2 percent.

Commodity Shipping Rate Falls to 28-Year Low on China Demand. A measure of global shipping costs for
commodities fell to a 28-year low as slowing growth in China’s
demand exacerbates the effect of a fleet glut. The Baltic Dry Index plunged 5.1 percent to 632 points, the
lowest since Aug. 22, 1986, according to data from the Baltic
Exchange in London on Thursday. Freight rates for all the vessel
types within the measure declined.

Oil’s Plunge Hurts Houston Office Sales, Calgary Leases. These are early signs that demand is weakening for
commercial properties in cities that depend on the energy
industry after crude oil prices fell below $50 a barrel, the
lowest in five-and-a-half years, from more than $100 in June.
Oil companies looking to reduce costs are cutting jobs and
choosing to stay put rather than buy or lease new space, said
Ross Moore, director of Canada research for CBRE.

Wall Street Creating CLOs That May Bypass Rules: Credit Markets. Wall Street has another rule it’s trying to
get around: regulations seeking to limit risk-taking by managers
of collateralized loan obligations. Leon Black’s Apollo Global Management LLC, Carlyle Group LP
and a unit of Credit Suisse Group AG have all taken steps in the
past two months to create CLOs now that they may be able to
refinance after the rules take effect in December 2016 without
having to comply with the new regulations, according to three
people with knowledge of the matter. The firms are trying to
avoid a requirement to hold a stake in the funds they manage.

U.S. Homeownership Rate Falls to a 20-Year Low. The U.S. homeownership rate fell to the
lowest in more than two decades in the fourth quarter as many
would-be buyers stayed on the sidelines, giving the rental
market a boost. The share of Americans who own their homes was 64 percent
in the fourth quarter, down from 64.4 percent in the previous
three months, the Census Bureau said in a report. The rate was
at the lowest since the second quarter of 1994, data compiled by
Bloomberg show.

Fox News:

Obama seeking to 'fully reverse' sequester cuts, raise spending caps in budget plan. (video) President Obama will push to "fully reverse" the so-called sequester
cuts and significantly raise government spending caps as part of his
upcoming budget plan, a proposal likely to anger fiscal conservatives
who want to see spending limits in place. The across-the-board cuts, agreed to by both parties, have been in
effect since 2013, after lawmakers were unable to produce a more
strategic deficit-cutting plan. Members of both parties have problems
with the cuts, which indiscriminately affect both domestic and defense
programs.

Greece could face rating downgrade if troika talks stall - Fitch. Greece could face a rating
downgrade if it cannot come to an agreement with its
international creditors by the time Fitch next assesses the
country in May, said Douglas Renwick, the firm's head of western
European sovereigns on Thursday."If by our next review on the 15th of May there is no
progress on these talks or they look to be failing, of course
that would be a trigger for a downgrade," said Renwick during a
conference call.

Russia Set to Hold Main Rate at 17% With No Cut Seen Before June. Russia will probably keep its main interest
rate unchanged this week and is unlikely to cut it from an
emergency level before June as stabilizing the ruble and taming
inflation take precedence over a looming recession, according to
two surveys of economists. The first reduction this year is likely in June or July,
according to a majority of respondents in a survey of 23
economists. The central bank will act once the inflation rate
has dropped to 11.2 percent or less, based on the median of 18
estimates. All but one analyst in a separate survey of 19
economists predict the Bank of Russia will hold its benchmark at
17 percent at a meeting on Friday.

Russian Consumer Crunch Spurs Tinkoff Stock Volatility. Price swings in TCS Group Holding Plc have
surged to the highest level in eight months as analysts cut
projections for the consumer lender amid a financial crisis
that’s making it more difficult for Russians to pay their debts. Fifty-day historical volatility, a measure of price
fluctuations during the period, jumped to 73 percent Wednesday
as the company’s London-traded shares headed for an eighth
straight monthly decline. The stock has sunk 84 percent from its
October 2013 initial public offering price of $17.50.

Greece Wants a Debt Break. What About Its Poorer Neighbors? The 40-year-old prime minister’s rise to power has put him on a
collision course with Germany, as he struggles to deliver on his
campaign promises to renegotiate his country’s debt and overturn the
painful austerity demanded by Greece's creditors. But if Tsipras is to bring home the deal he feels Greece deserves, he
will have to more than face down the Germans. He’ll have to win over
skeptical taxpayer in other euro zone countries, reassure European
leaders worried about insurgent challenges of their own and make the
case that – in a Europe still reeling from the 2008 global financial
crisis – Greece is uniquely deserving of assistance.

Japan’s Retail Sales Unexpectedly Slump in Challenge to Abe. Japanese retail sales unexpectedly fell in
December, underscoring challenges to Prime Minister Shinzo Abe’s
effort to stoke a recovery in the world’s third-biggest economy. Sales slid 0.3 percent from November for a third straight
monthly decline, the trade ministry said Thursday in Tokyo. That
compared with the median estimate for a 0.3 percent gain in a
Bloomberg News survey. Sales increased 1.7 percent in 2014.

With India Bulls Everywhere, a Rare Look at the Risks. There are times in financial-market rallies
where the gains become so spectacular and the euphoria reaches
such a pitch that it becomes easy to forget about the risks. India, it could be argued, is going through such a moment.

China Stocks Fall for Third Day as CSRC Starts New Margin Probe. China’s stocks fell for a third day, sending
the benchmark index to a one-week low, amid speculation
increased regulatory scrutiny of margin loans will spur some
leveraged investors to reduce holdings. Citic Securities Co. and Haitong Securities led declines
for financial companies with losses of at least 1.8 percent. The
securities regulator plans a new round of checks into the
margin-lending businesses of brokerages, the Xinhua News Agency
reported Wednesday night. Trainmakers China CNR Corp. and CSR
Corp. rose at least 1.6 percent after the government said it
will promote railway firms’ overseas investments. “The authorities sent a signal that they don’t feel
comfortable,” said Yuliang Chang, Hong Kong-based strategist at
Deutsche Bank AG. The pace of growth in margin lending and
umbrella trusts “is creating a systemic risk in the financial
industry,” he said. The Shanghai Composite Index dropped 0.9 percent to
3,275.18 at 10:28 a.m. local time.

Asian Stocks Track U.S. Declines After Federal Reserve Statement. Asian stocks fell, tracking declines in U.S.
equities, after the Federal Reserve cited international risks to
the American economy and oil slumped below $45 per barrel. The MSCI Asia Pacific Index slid 0.5 percent to 141.74 as
of 9:01 a.m. in Tokyo. The Fed acknowledged global risks in its
statement Wednesday, saying that it will take into account
readings on “international developments” as it decides how
long to keep key rates near zero. While boosting their
assessment of the economy, policy makers said inflation will
probably slow further. U.S. oil supplies climbed to their
highest level in data going back more than 30 years,
exacerbating concerns over a global supply glut.

Tesla(TSLA) Bears Rev Engine on Falling Oil, China Skepticism. Slumping oil prices have restored Tesla
Motors Inc.’s status as a favorite among short sellers and
bearish options traders. Speculation that a 58-percent plunge in West Texas
Intermediate crude since June and competition from General
Motors Co. will hurt demand have pushed short sales to a one-year high. The difference in the cost of bearish options versus
bullish ones has almost quadrupled from September, reaching the
highest level since November 2012, data compiled by Bloomberg
show.

Wall Street Journal:

U.S. Must Return Guantanamo for Normal Relations With Cuba, Raúl Castro Says. Demands Come as Two Nations Move Toward Renewing Full Diplomatic Relations. Cuban President Raúl Castro demanded Wednesday that the U.S. return
the base at Guantanamo Bay, lift the half-century trade embargo on Cuba
and compensate his country for damages before the two nations
re-establish normal relations.

Islamic State Offshoots Spring Up in Egypt, Other Countries. Egyptian Army Battles a Deadly Sinai Insurgency. The video looks hard to distinguish from the ones filmed in Syria and
Iraq. Islamic State gunmen arrive in a fleet of pickup trucks, set up
checkpoints on a busy highway and start hauling away suspected
collaborators with the “apostate” government. It ends, predictably, with
forced confessions and gruesome, close-up shots of killings.

Militants Driven From Pakistan Flock to Afghan Towns. Migration to Lawless Regions Pose New Threat to National Security. Arab and Central Asian Islamist militants have moved into Afghanistan
after a military offensive by Islamabad largely eliminated havens in
Pakistan’s tribal areas, Afghan officials and local residents say,
posing a potential new threat to the country’s already tenuous security.

Up to Six Million Households Facing Penalty for Skipping Health Insurance. The Fine for Not Carrying Insurance in 2014 is $95 per Adult, or 1% of Family Income. The U.S. government estimates as many as six million households may have
to pay a penalty for not having had health-insurance coverage last year
as required under the Affordable Care Act, officials said Wednesday.

Building Toward Another Mortgage Meltdown. In the name of ‘affordable’ loans, the White House is creating the conditions for a replay of the housing disaster. The Obama administration’s troubling flirtation with another mortgage
meltdown took an unsettling turn on Tuesday with Federal Housing
Finance Agency Director Mel Watt’s testimony before the House Financial
Services Committee.

Qualcomm(QCOM) says key customer passed on new chip, stock drops. Qualcomm Inc reduced its outlook for fiscal 2015, saying it expects its newest Snapdragon mobile chip will not be used in a major customer's flagship smartphone, sending its shares lower. The San Diego, California, company also warned that
"challenges" with another of its chips had hurt its
competitiveness in China, where Qualcomm has been disappointed
with growth that has fallen short of expectations.

Bild:

EU's
Schulz Sees Non Majority for Greek Debt Cut. EU Parliament President
Martin Schulz says he will speak frankly to Greek Prime Minister Alexis
Tsipras on trip to Athens and tell him to ask the billionaires who
stashed money abroad to pay their taxes, citing an interview. Sees
coalition with right-wing populist party as problematic, remains to be
seen how the parties will cope with their internal contradictions. Greece's rejection of sanctions against Russia doesn't mark a successful debut; EU sanctions have held together and solo efforts don't go so easily without consultations.

Le Figaro:

EC President Juncker Says Greece Should Respect Europe. Europe won't provide credit unless Greece sticks to commitments, European Commission President Jean-Claude Juncker says in an interview. No question of forgiving Greek debt, he said. A country can't take "democratic choice" to go against European treaties, Juncker said.

BOTTOM LINE: Asian indices are lower, weighed down by real estate and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

The positions and strategies discussed on BETWEEN THE HEDGES are offered for entertainment purposes only and are in no way intended to serve as personal investing advice. Readers should not make any investment decision without first conducting their own thorough due diligence. Readers should assume the editor of this blog holds a position in any securities discussed, recommended or panned. While the information provided is obtained from sources believed to be reliable, its accuracy or completeness cannot be guaranteed, nor can this publication be, in anyway, considered liable for the investment performance of any securities or strategies discussed.